Begun and held at the City of Washington on Tuesday, the fifth
day of January, two thousand and ten

S. 1147

IN THE SENATE OF THE UNITED
STATES

AN ACT

To prevent tobacco smuggling, to ensure the
collection of all tobacco taxes, and for other purposes.

1.

Short title; findings; purposes

(a)

Short title

This Act may be cited as the
Prevent All Cigarette Trafficking Act
of 2009 or PACT
Act.

(b)

Findings

Congress finds that—

(1)

the sale of illegal cigarettes and
smokeless tobacco products significantly reduces Federal, State, and local
government revenues, with Internet sales alone accounting for billions of
dollars of lost Federal, State, and local tobacco tax revenue each year;

(2)

Hezbollah, Hamas, al Qaeda, and other
terrorist organizations have profited from trafficking in illegal cigarettes or
counterfeit cigarette tax stamps;

(3)

terrorist involvement in illicit cigarette
trafficking will continue to grow because of the large profits such
organizations can earn;

(4)

the sale of illegal cigarettes and
smokeless tobacco over the Internet, and through mail, fax, or phone orders,
makes it cheaper and easier for children to obtain tobacco products;

(5)

the majority of Internet and other remote
sales of cigarettes and smokeless tobacco are being made without adequate
precautions to protect against sales to children, without the payment of
applicable taxes, and without complying with the nominal registration and
reporting requirements in existing Federal law;

(6)

unfair competition from illegal sales of
cigarettes and smokeless tobacco is taking billions of dollars of sales away
from law-abiding retailers throughout the United States;

(7)

with rising State and local tobacco tax
rates, the incentives for the illegal sale of cigarettes and smokeless tobacco
have increased;

(8)

the number of active tobacco investigations
being conducted by the Bureau of Alcohol, Tobacco, Firearms, and Explosives
rose to 452 in 2005;

(9)

the number of Internet vendors in the
United States and in foreign countries that sell cigarettes and smokeless
tobacco to buyers in the United States increased from only about 40 in 2000 to
more than 500 in 2005; and

(10)

the intrastate sale of illegal cigarettes
and smokeless tobacco over the Internet has a substantial effect on interstate
commerce.

(c)

Purposes

It is the purpose of this Act to—

(1)

require Internet and other remote sellers
of cigarettes and smokeless tobacco to comply with the same laws that apply to
law-abiding tobacco retailers;

(2)

create strong disincentives to illegal
smuggling of tobacco products;

(3)

provide government enforcement officials
with more effective enforcement tools to combat tobacco smuggling;

(4)

make it more difficult for cigarette and
smokeless tobacco traffickers to engage in and profit from their illegal
activities;

(5)

increase collections of Federal, State, and
local excise taxes on cigarettes and smokeless tobacco; and

The Act of October 19, 1949 (15 U.S.C. 375
et seq.; commonly referred to as the Jenkins Act) (referred to
in this Act as the Jenkins Act), is amended by striking the
first section and inserting the following:

1.

Definitions

As used in this Act, the following
definitions apply:

(1)

Attorney General

The term attorney general,
with respect to a State, means the attorney general or other chief law
enforcement officer of the State.

(2)

Cigarette

(A)

In general

The term cigarette—

(i)

has the meaning given that term in section
2341 of title 18, United States Code; and

(ii)

includes roll-your-own tobacco (as defined
in section 5702 of the Internal Revenue Code of 1986).

(B)

Exception

The term cigarette does not
include a cigar (as defined in section 5702 of the Internal Revenue Code of
1986).

(3)

Common
carrier

The term common
carrier means any person (other than a local messenger service or the
United States Postal Service) that holds itself out to the general public as a
provider for hire of the transportation by water, land, or air of merchandise
(regardless of whether the person actually operates the vessel, vehicle, or
aircraft by which the transportation is provided) between a port or place and a
port or place in the United States.

(4)

Consumer

The term consumer—

(A)

means any person that purchases cigarettes
or smokeless tobacco; and

(B)

does not include any person lawfully
operating as a manufacturer, distributor, wholesaler, or retailer of cigarettes
or smokeless tobacco.

(5)

Delivery sale

The term delivery sale means
any sale of cigarettes or smokeless tobacco to a consumer if—

(A)

the consumer submits the order for the sale
by means of a telephone or other method of voice transmission, the mails, or
the Internet or other online service, or the seller is otherwise not in the
physical presence of the buyer when the request for purchase or order is made;
or

(B)

the cigarettes or smokeless tobacco are
delivered to the buyer by common carrier, private delivery service, or other
method of remote delivery, or the seller is not in the physical presence of the
buyer when the buyer obtains possession of the cigarettes or smokeless
tobacco.

(6)

Delivery seller

The term delivery seller means
a person who makes a delivery sale.

(7)

Indian
country

The term
Indian country—

(A)

has the meaning given that term in section
1151 of title 18, United States Code, except that within the State of Alaska
that term applies only to the Metlakatla Indian Community, Annette Island
Reserve; and

(B)

includes any other land held by the United
States in trust or restricted status for one or more Indian tribes.

(8)

Indian tribe

The term Indian tribe,
tribe, or tribal refers to an Indian tribe as defined
in section 4(e) of the Indian Self-Determination
and Education Assistance Act (25 U.S.C. 450b(e)) or as listed
pursuant to section 104 of the Federally Recognized Indian Tribe List Act of
1994 (25 U.S.C. 479a–1).

(9)

Interstate commerce

(A)

In general

The term interstate commerce
means commerce between a State and any place outside the State, commerce
between a State and any Indian country in the State, or commerce between points
in the same State but through any place outside the State or through any Indian
country.

(B)

Into a State, place, or
locality

A sale, shipment, or
transfer of cigarettes or smokeless tobacco that is made in interstate
commerce, as defined in this paragraph, shall be deemed to have been made into
the State, place, or locality in which such cigarettes or smokeless tobacco are
delivered.

(10)

Person

The term person means an
individual, corporation, company, association, firm, partnership, society,
State government, local government, Indian tribal government, governmental
organization of such a government, or joint stock company.

(11)

State

The term State means each of
the several States of the United States, the District of Columbia, the
Commonwealth of Puerto Rico, or any territory or possession of the United
States.

(12)

Smokeless tobacco

The term smokeless tobacco
means any finely cut, ground, powdered, or leaf tobacco, or other product
containing tobacco, that is intended to be placed in the oral or nasal cavity
or otherwise consumed without being combusted.

(13)

Tobacco tax administrator

The term tobacco tax
administrator means the State, local, or tribal official duly authorized
to collect the tobacco tax or administer the tax law of a State, locality, or
tribe, respectively.

(14)

Use

The term use includes the
consumption, storage, handling, or disposal of cigarettes or smokeless
tobacco.

.

(b)

Reports to State tobacco tax
administrators

Section 2 of
the Jenkins Act (15 U.S.C. 376) is amended—

(1)

by striking cigarettes each
place it appears and inserting cigarettes or smokeless
tobacco;

(2)

in subsection (a)—

(A)

in the matter preceding paragraph
(1)—

(i)

by inserting Contents.— after
(a);

(ii)

by striking or transfers and
inserting , transfers, or ships;

(iii)

by inserting , locality, or Indian
country of an Indian tribe after a State;

(iv)

by striking to other than a
distributor licensed by or located in such State,; and

(v)

by striking or transfer and
shipment and inserting , transfer, or shipment;

(B)

in paragraph (1)—

(i)

by striking with the tobacco tax
administrator of the State and inserting with the Attorney
General of the United States and with the tobacco tax administrators of the
State and place; and

(ii)

by striking ; and and
inserting the following: , as well as telephone numbers for each place
of business, a principal electronic mail address, any website addresses, and
the name, address, and telephone number of an agent in the State authorized to
accept service on behalf of the person;;

(C)

in paragraph (2), by striking and
the quantity thereof. and inserting the quantity thereof, and
the name, address, and phone number of the person delivering the shipment to
the recipient on behalf of the delivery seller, with all invoice or memoranda
information relating to specific customers to be organized by city or town and
by zip code; and; and

(D)

by adding at the end the following:

(3)

with respect to each memorandum or invoice
filed with a State under paragraph (2), also file copies of the memorandum or
invoice with the tobacco tax administrators and chief law enforcement officers
of the local governments and Indian tribes operating within the borders of the
State that apply their own local or tribal taxes on cigarettes or smokeless
tobacco.

;

(3)

in subsection (b)—

(A)

by inserting Presumptive Evidence.—
after (b);

(B)

by striking (1) that and
inserting that; and

(C)

by striking , and (2) and
all that follows and inserting a period; and

(4)

by adding at the end the following:

(c)

Use of information

A tobacco tax administrator or chief law
enforcement officer who receives a memorandum or invoice under paragraph (2) or
(3) of subsection (a) shall use the memorandum or invoice solely for the
purposes of the enforcement of this Act and the collection of any taxes owed on
related sales of cigarettes and smokeless tobacco, and shall keep confidential
any personal information in the memorandum or invoice except as required for
such
purposes.

.

(c)

Requirements for delivery
sales

The Jenkins Act is
amended by inserting after section 2 the following:

2A.

Delivery sales

(a)

In general

With respect to delivery sales into a
specific State and place, each delivery seller shall comply with—

(1)

the shipping requirements set forth in
subsection (b);

(2)

the recordkeeping requirements set forth in
subsection (c);

(3)

all State, local, tribal, and other laws
generally applicable to sales of cigarettes or smokeless tobacco as if the
delivery sales occurred entirely within the specific State and place, including
laws imposing—

(A)

excise taxes;

(B)

licensing and tax-stamping
requirements;

(C)

restrictions on sales to minors; and

(D)

other payment obligations or legal
requirements relating to the sale, distribution, or delivery of cigarettes or
smokeless tobacco; and

(4)

the tax collection requirements set forth
in subsection (d).

(b)

Shipping and packaging

(1)

Required statement

For any shipping package containing
cigarettes or smokeless tobacco, the delivery seller shall include on the bill
of lading, if any, and on the outside of the shipping package, on the same
surface as the delivery address, a clear and conspicuous statement providing as
follows: CIGARETTES/SMOKELESS TOBACCO: FEDERAL LAW REQUIRES THE PAYMENT
OF ALL APPLICABLE EXCISE TAXES, AND COMPLIANCE WITH APPLICABLE LICENSING AND
TAX-STAMPING OBLIGATIONS.

(2)

Failure to label

Any shipping package described in paragraph
(1) that is not labeled in accordance with that paragraph shall be treated as
nondeliverable matter by a common carrier or other delivery service, if the
common carrier or other delivery service knows or should know the package
contains cigarettes or smokeless tobacco. If a common carrier or other delivery
service believes a package is being submitted for delivery in violation of
paragraph (1), it may require the person submitting the package for delivery to
establish that it is not being sent in violation of paragraph (1) before
accepting the package for delivery. Nothing in this paragraph shall require the
common carrier or other delivery service to open any package to determine its
contents.

(3)

Weight restriction

A delivery seller shall not sell, offer for
sale, deliver, or cause to be delivered in any single sale or single delivery
any cigarettes or smokeless tobacco weighing more than 10 pounds.

(4)

Age verification

(A)

In general

A delivery seller who mails or ships
tobacco products—

(i)

shall not sell, deliver, or cause to be
delivered any tobacco products to a person under the minimum age required for
the legal sale or purchase of tobacco products, as determined by the applicable
law at the place of delivery;

(ii)

shall use a method of mailing or shipping
that requires—

(I)

the purchaser placing the delivery sale
order, or an adult who is at least the minimum age required for the legal sale
or purchase of tobacco products, as determined by the applicable law at the
place of delivery, to sign to accept delivery of the shipping container at the
delivery address; and

(II)

the person who signs to accept delivery of
the shipping container to provide proof, in the form of a valid,
government-issued identification bearing a photograph of the individual, that
the person is at least the minimum age required for the legal sale or purchase
of tobacco products, as determined by the applicable law at the place of
delivery; and

(iii)

shall not accept a delivery sale order from
a person without—

(I)

obtaining the full name, birth date, and
residential address of that person; and

(II)

verifying the information provided in
subclause (I), through the use of a commercially available database or
aggregate of databases, consisting primarily of data from government sources,
that are regularly used by government and businesses for the purpose of age and
identity verification and authentication, to ensure that the purchaser is at
least the minimum age required for the legal sale or purchase of tobacco
products, as determined by the applicable law at the place of delivery.

(B)

Limitation

No database being used for age and identity
verification under subparagraph (A)(iii) shall be in the possession or under
the control of the delivery seller, or be subject to any changes or
supplementation by the delivery seller.

(c)

Records

(1)

In general

Each delivery seller shall keep a record of
any delivery sale, including all of the information described in section
2(a)(2), organized by the State, and within the State, by the city or town and
by zip code, into which the delivery sale is so made.

(2)

Record retention

Records of a delivery sale shall be kept as
described in paragraph (1) until the end of the 4th full calendar year that
begins after the date of the delivery sale.

(3)

Access for officials

Records kept under paragraph (1) shall be
made available to tobacco tax administrators of the States, to local
governments and Indian tribes that apply local or tribal taxes on cigarettes or
smokeless tobacco, to the attorneys general of the States, to the chief law
enforcement officers of the local governments and Indian tribes, and to the
Attorney General of the United States in order to ensure the compliance of
persons making delivery sales with the requirements of this Act.

(d)

Delivery

(1)

In general

Except as provided in paragraph (2), no
delivery seller may sell or deliver to any consumer, or tender to any common
carrier or other delivery service, any cigarettes or smokeless tobacco pursuant
to a delivery sale unless, in advance of the sale, delivery, or tender—

(A)

any cigarette or smokeless tobacco excise
tax that is imposed by the State in which the cigarettes or smokeless tobacco
are to be delivered has been paid to the State;

(B)

any cigarette or smokeless tobacco excise
tax that is imposed by the local government of the place in which the
cigarettes or smokeless tobacco are to be delivered has been paid to the local
government; and

(C)

any required stamps or other indicia that
the excise tax has been paid are properly affixed or applied to the cigarettes
or smokeless tobacco.

(2)

Exception

Paragraph (1) does not apply to a delivery
sale of smokeless tobacco if the law of the State or local government of the
place where the smokeless tobacco is to be delivered requires or otherwise
provides that delivery sellers collect the excise tax from the consumer and
remit the excise tax to the State or local government, and the delivery seller
complies with the requirement.

(e)

List of unregistered or noncompliant
delivery sellers

(1)

In general

(A)

Initial list

Not later than 90 days after this
subsection goes into effect under the Prevent
All Cigarette Trafficking Act of 2009, the Attorney General of
the United States shall compile a list of delivery sellers of cigarettes or
smokeless tobacco that have not registered with the Attorney General of the
United States pursuant to section 2(a), or that are otherwise not in compliance
with this Act, and—

(i)

distribute the list to—

(I)

the attorney general and tax administrator
of every State;

(II)

common carriers and other persons that
deliver small packages to consumers in interstate commerce, including the
United States Postal Service; and

(III)

any other person that the Attorney General
of the United States determines can promote the effective enforcement of this
Act; and

(ii)

publicize and make the list available to
any other person engaged in the business of interstate deliveries or who
delivers cigarettes or smokeless tobacco in or into any State.

(B)

List contents

To the extent known, the Attorney General
of the United States shall include, for each delivery seller on the list
described in subparagraph (A)—

(i)

all names the delivery seller uses or has
used in the transaction of its business or on packages delivered to
customers;

(ii)

all addresses from which the delivery
seller does or has done business, or ships or has shipped cigarettes or
smokeless tobacco;

(iii)

the website addresses, primary e-mail
address, and phone number of the delivery seller; and

(iv)

any other information that the Attorney
General of the United States determines would facilitate compliance with this
subsection by recipients of the list.

(C)

Updating

The Attorney General of the United States
shall update and distribute the list described in subparagraph (A) at least
once every 4 months, and may distribute the list and any updates by regular
mail, electronic mail, or any other reasonable means, or by providing
recipients with access to the list through a nonpublic website that the
Attorney General of the United States regularly updates.

(D)

State, local, or Tribal
additions

The Attorney
General of the United States shall include in the list described in
subparagraph (A) any noncomplying delivery sellers identified by any State,
local, or tribal government under paragraph (6), and shall distribute the list
to the attorney general or chief law enforcement official and the tax
administrator of any government submitting any such information, and to any
common carriers or other persons who deliver small packages to consumers
identified by any government pursuant to paragraph (6).

(E)

Accuracy and completeness of list of
noncomplying delivery sellers

In preparing and revising the list
described in subparagraph (A), the Attorney General of the United States
shall—

(i)

use reasonable procedures to ensure maximum
possible accuracy and completeness of the records and information relied on for
the purpose of determining that a delivery seller is not in compliance with
this Act;

(ii)

not later than 14 days before including a
delivery seller on the list, make a reasonable attempt to send notice to the
delivery seller by letter, electronic mail, or other means that the delivery
seller is being placed on the list, which shall cite the relevant provisions of
this Act and the specific reasons for which the delivery seller is being placed
on the list;

(iii)

provide an opportunity to the delivery
seller to challenge placement on the list;

(iv)

investigate each challenge described in
clause (iii) by contacting the relevant Federal, State, tribal, and local law
enforcement officials, and provide the specific findings and results of the
investigation to the delivery seller not later than 30 days after the date on
which the challenge is made; and

(v)

if the Attorney General of the United
States determines that the basis for including a delivery seller on the list is
inaccurate, based on incomplete information, or cannot be verified, promptly
remove the delivery seller from the list as appropriate and notify each
appropriate Federal, State, tribal, and local authority of the
determination.

(F)

Confidentiality

The list described in subparagraph (A)
shall be confidential, and any person receiving the list shall maintain the
confidentiality of the list and may deliver the list, for enforcement purposes,
to any government official or to any common carrier or other person that
delivers tobacco products or small packages to consumers. Nothing in this
section shall prohibit a common carrier, the United States Postal Service, or
any other person receiving the list from discussing with a listed delivery
seller the inclusion of the delivery seller on the list and the resulting
effects on any services requested by the listed delivery seller.

(2)

Prohibition on delivery

(A)

In general

Commencing on the date that is 60 days
after the date of the initial distribution or availability of the list
described in paragraph (1)(A), no person who receives the list under paragraph
(1), and no person who delivers cigarettes or smokeless tobacco to consumers,
shall knowingly complete, cause to be completed, or complete its portion of a
delivery of any package for any person whose name and address are on the list,
unless—

(i)

the person making the delivery knows or
believes in good faith that the item does not include cigarettes or smokeless
tobacco;

(ii)

the delivery is made to a person lawfully
engaged in the business of manufacturing, distributing, or selling cigarettes
or smokeless tobacco; or

(iii)

the package being delivered weighs more
than 100 pounds and the person making the delivery does not know or have
reasonable cause to believe that the package contains cigarettes or smokeless
tobacco.

(B)

Implementation of updates

Commencing on the date that is 30 days
after the date of the distribution or availability of any updates or
corrections to the list described in paragraph (1)(A), all recipients and all
common carriers or other persons that deliver cigarettes or smokeless tobacco
to consumers shall be subject to subparagraph (A) in regard to the corrections
or updates.

(3)

Exemptions

(A)

In general

Subsection (b)(2) and any requirements or
restrictions placed directly on common carriers under this subsection,
including subparagraphs (A) and (B) of paragraph (2), shall not apply to a
common carrier that—

(i)

is subject to a settlement agreement
described in subparagraph (B); or

(ii)

if a settlement agreement described in
subparagraph (B) to which the common carrier is a party is terminated or
otherwise becomes inactive, is administering and enforcing policies and
practices throughout the United States that are at least as stringent as the
agreement.

(B)

Settlement agreement

A settlement agreement described in this
subparagraph—

(i)

is a settlement agreement relating to
tobacco product deliveries to consumers; and

(ii)

includes—

(I)

the Assurance of Discontinuance entered
into by the Attorney General of New York and DHL Holdings USA, Inc. and DHL
Express (USA), Inc. on or about July 1, 2005, the Assurance of Discontinuance
entered into by the Attorney General of New York and United Parcel Service,
Inc. on or about October 21, 2005, and the Assurance of Compliance entered into
by the Attorney General of New York and Federal Express Corporation and FedEx
Ground Package Systems, Inc. on or about February 3, 2006, if each of those
agreements is honored throughout the United States to block illegal deliveries
of cigarettes or smokeless tobacco to consumers; and

(II)

any other active agreement between a common
carrier and a State that operates throughout the United States to ensure that
no deliveries of cigarettes or smokeless tobacco shall be made to consumers or
illegally operating Internet or mail-order sellers and that any such deliveries
to consumers shall not be made to minors or without payment to the States and
localities where the consumers are located of all taxes on the tobacco
products.

(4)

Shipments from persons on list

(A)

In general

If a common carrier or other delivery
service delays or interrupts the delivery of a package in the possession of the
common carrier or delivery service because the common carrier or delivery
service determines or has reason to believe that the person ordering the
delivery is on a list described in paragraph (1)(A) and that clauses (i), (ii),
and (iii) of paragraph (2)(A) do not apply—

(i)

the person ordering the delivery shall be
obligated to pay—

(I)

the common carrier or other delivery
service as if the delivery of the package had been timely completed; and

(II)

if the package is not deliverable, any
reasonable additional fee or charge levied by the common carrier or other
delivery service to cover any extra costs and inconvenience and to serve as a
disincentive against such noncomplying delivery orders; and

(ii)

if the package is determined not to be
deliverable, the common carrier or other delivery service shall offer to
provide the package and its contents to a Federal, State, or local law
enforcement agency.

(B)

Records

A common carrier or other delivery service
shall maintain, for a period of 5 years, any records kept in the ordinary
course of business relating to any delivery interrupted under this paragraph
and provide that information, upon request, to the Attorney General of the
United States or to the attorney general or chief law enforcement official or
tax administrator of any State, local, or tribal government.

(C)

Confidentiality

Any person receiving records under
subparagraph (B) shall—

(i)

use the records solely for the purposes of
the enforcement of this Act and the collection of any taxes owed on related
sales of cigarettes and smokeless tobacco; and

(ii)

keep confidential any personal information
in the records not otherwise required for such purposes.

(5)

Preemption

(A)

In general

No State, local, or tribal government, nor
any political authority of 2 or more State, local, or tribal governments, may
enact or enforce any law or regulation relating to delivery sales that
restricts deliveries of cigarettes or smokeless tobacco to consumers by common
carriers or other delivery services on behalf of delivery sellers by—

(i)

requiring that the common carrier or other
delivery service verify the age or identity of the consumer accepting the
delivery by requiring the person who signs to accept delivery of the shipping
container to provide proof, in the form of a valid, government-issued
identification bearing a photograph of the individual, that the person is at
least the minimum age required for the legal sale or purchase of tobacco
products, as determined by either State or local law at the place of
delivery;

(ii)

requiring that the common carrier or other
delivery service obtain a signature from the consumer accepting the
delivery;

(iii)

requiring that the common carrier or other
delivery service verify that all applicable taxes have been paid;

(iv)

requiring that packages delivered by the
common carrier or other delivery service contain any particular labels, notice,
or markings; or

(v)

prohibiting common carriers or other
delivery services from making deliveries on the basis of whether the delivery
seller is or is not identified on any list of delivery sellers maintained and
distributed by any entity other than the Federal Government.

(B)

Relationship to other laws

Except as provided in subparagraph (C),
nothing in this paragraph shall be construed to nullify, expand, restrict, or
otherwise amend or modify—

(i)

section 14501(c)(1) or 41713(b)(4) of title
49, United States Code;

(ii)

any other restrictions in Federal law on
the ability of State, local, or tribal governments to regulate common carriers;
or

(iii)

any provision of State, local, or tribal
law regulating common carriers that is described in section 14501(c)(2) or
41713(b)(4)(B) of title 49 of the United States Code.

(C)

State laws prohibiting delivery
sales

(i)

In general

Except as provided in clause (ii), nothing
in the Prevent All Cigarette Trafficking Act of 2009, the amendments made by
that Act, or in any other Federal statute shall be construed to preempt,
supersede, or otherwise limit or restrict State laws prohibiting the delivery
sale, or the shipment or delivery pursuant to a delivery sale, of cigarettes or
other tobacco products to individual consumers or personal residences.

(ii)

Exemptions

No State may enforce against a common
carrier a law prohibiting the delivery of cigarettes or other tobacco products
to individual consumers or personal residences without proof that the common
carrier is not exempt under paragraph (3) of this subsection.

(6)

State, local, and tribal additions

(A)

In general

Any State, local, or tribal government
shall provide the Attorney General of the United States with—

(i)

all known names, addresses, website
addresses, and other primary contact information of any delivery seller
that—

(I)

offers for sale or makes sales of
cigarettes or smokeless tobacco in or into the State, locality, or tribal land;
and

(II)

has failed to register with or make reports
to the respective tax administrator as required by this Act, or that has been
found in a legal proceeding to have otherwise failed to comply with this Act;
and

(ii)

a list of common carriers and other persons
who make deliveries of cigarettes or smokeless tobacco in or into the State,
locality, or tribal land.

(B)

Updates

Any government providing a list to the
Attorney General of the United States under subparagraph (A) shall also provide
updates and corrections every 4 months until such time as the government
notifies the Attorney General of the United States in writing that the
government no longer desires to submit information to supplement the list
described in paragraph (1)(A).

(C)

Removal after withdrawal

Upon receiving written notice that a
government no longer desires to submit information under subparagraph (A), the
Attorney General of the United States shall remove from the list described in
paragraph (1)(A) any persons that are on the list solely because of the prior
submissions of the government of the list of the government of noncomplying
delivery sellers of cigarettes or smokeless tobacco or a subsequent update or
correction by the government.

(7)

Deadline to incorporate
additions

The Attorney
General of the United States shall—

(A)

include any delivery seller identified and
submitted by a State, local, or tribal government under paragraph (6) in any
list or update that is distributed or made available under paragraph (1) on or
after the date that is 30 days after the date on which the information is
received by the Attorney General of the United States; and

(B)

distribute any list or update described in
subparagraph (A) to any common carrier or other person who makes deliveries of
cigarettes or smokeless tobacco that has been identified and submitted by a
government pursuant to paragraph (6).

(8)

Notice to delivery sellers

Not later than 14 days before including any
delivery seller on the initial list described in paragraph (1)(A), or on an
update to the list for the first time, the Attorney General of the United
States shall make a reasonable attempt to send notice to the delivery seller by
letter, electronic mail, or other means that the delivery seller is being
placed on the list or update, with that notice citing the relevant provisions
of this Act.

(9)

Limitations

(A)

In general

Any common carrier or other person making a
delivery subject to this subsection shall not be required or otherwise
obligated to—

(i)

determine whether any list distributed or
made available under paragraph (1) is complete, accurate, or up-to-date;

(ii)

determine whether a person ordering a
delivery is in compliance with this Act; or

(iii)

open or inspect, pursuant to this Act, any
package being delivered to determine its contents.

(B)

Alternate names

Any common carrier or other person making a
delivery subject to this subsection—

(i)

shall not be required to make any inquiries
or otherwise determine whether a person ordering a delivery is a delivery
seller on the list described in paragraph (1)(A) who is using a different name
or address in order to evade the related delivery restrictions; and

(ii)

shall not knowingly deliver any packages to
consumers for any delivery seller on the list described in paragraph (1)(A) who
the common carrier or other delivery service knows is a delivery seller who is
on the list and is using a different name or address to evade the delivery
restrictions of paragraph (2).

(C)

Penalties

Any common carrier or person in the
business of delivering packages on behalf of other persons shall not be subject
to any penalty under section 14101(a) of title 49, United States Code, or any
other provision of law for—

(i)

not making any specific delivery, or any
deliveries at all, on behalf of any person on the list described in paragraph
(1)(A);

(ii)

refusing, as a matter of regular practice
and procedure, to make any deliveries, or any deliveries in certain States, of
any cigarettes or smokeless tobacco for any person or for any person not in the
business of manufacturing, distributing, or selling cigarettes or smokeless
tobacco; or

(iii)

delaying or not making a delivery for any
person because of reasonable efforts to comply with this Act.

(D)

Other limits

Section 2 and subsections (a), (b), (c),
and (d) of this section shall not be interpreted to impose any
responsibilities, requirements, or liability on common carriers.

(f)

Presumption

For purposes of this Act, a delivery sale
shall be deemed to have occurred in the State and place where the buyer obtains
personal possession of the cigarettes or smokeless tobacco, and a delivery
pursuant to a delivery sale is deemed to have been initiated or ordered by the
delivery
seller.

.

(d)

Penalties

The Jenkins Act is amended by striking
section 3 and inserting the following:

3.

Penalties

(a)

Criminal penalties

(1)

In general

Except as provided in paragraph (2),
whoever knowingly violates this Act shall be imprisoned for not more than 3
years, fined under title 18, United States Code, or both.

(2)

Exceptions

(A)

Governments

Paragraph (1) shall not apply to a State,
local, or tribal government.

(B)

Delivery violations

A common carrier or independent delivery
service, or employee of a common carrier or independent delivery service, shall
be subject to criminal penalties under paragraph (1) for a violation of section
2A(e) only if the violation is committed knowingly—

(i)

as consideration for the receipt of, or as
consideration for a promise or agreement to pay, anything of pecuniary value;
or

(ii)

for the purpose of assisting a delivery
seller to violate, or otherwise evading compliance with, section 2A.

(b)

Civil penalties

(1)

In general

Except as provided in paragraph (3),
whoever violates this Act shall be subject to a civil penalty in an amount not
to exceed—

(A)

in the case of a delivery seller, the
greater of—

(i)

$5,000 in the case of the first violation,
or $10,000 for any other violation; or

(ii)

for any violation, 2 percent of the gross
sales of cigarettes or smokeless tobacco of the delivery seller during the
1-year period ending on the date of the violation.

(B)

in the case of a common carrier or other
delivery service, $2,500 in the case of a first violation, or $5,000 for any
violation within 1 year of a prior violation.

(2)

Relation to other penalties

A civil penalty imposed under paragraph (1)
for a violation of this Act shall be imposed in addition to any criminal
penalty under subsection (a) and any other damages, equitable relief, or
injunctive relief awarded by the court, including the payment of any unpaid
taxes to the appropriate Federal, State, local, or tribal governments.

(3)

Exceptions

(A)

Delivery violations

An employee of a common carrier or
independent delivery service shall be subject to civil penalties under
paragraph (1) for a violation of section 2A(e) only if the violation is
committed intentionally—

(i)

as consideration for the receipt of, or as
consideration for a promise or agreement to pay, anything of pecuniary value;
or

(ii)

for the purpose of assisting a delivery
seller to violate, or otherwise evading compliance with, section 2A.

(B)

Other limitations

No common carrier or independent delivery
service shall be subject to civil penalties under paragraph (1) for a violation
of section 2A(e) if—

(i)

the common carrier or independent delivery
service has implemented and enforces effective policies and practices for
complying with that section; or

(ii)

the violation consists of an employee of
the common carrier or independent delivery service who physically receives and
processes orders, picks up packages, processes packages, or makes deliveries,
taking actions that are outside the scope of employment of the employee, or
that violate the implemented and enforced policies of the common carrier or
independent delivery service described in clause
(i).

.

(e)

Enforcement

The Jenkins Act is amended by striking
section 4 and inserting the following:

4.

Enforcement

(a)

In general

The United States district courts shall
have jurisdiction to prevent and restrain violations of this Act and to provide
other appropriate injunctive or equitable relief, including money damages, for
the violations.

(b)

Authority of the attorney
general

The Attorney General
of the United States shall administer and enforce this Act.

(c)

State, local, and tribal
enforcement

(1)

In general

(A)

Standing

A State, through its attorney general, or a
local government or Indian tribe that levies a tax subject to section 2A(a)(3),
through its chief law enforcement officer, may bring an action in a United
States district court to prevent and restrain violations of this Act by any
person or to obtain any other appropriate relief from any person for violations
of this Act, including civil penalties, money damages, and injunctive or other
equitable relief.

(B)

Sovereign immunity

Nothing in this Act shall be deemed to
abrogate or constitute a waiver of any sovereign immunity of a State or local
government or Indian tribe against any unconsented lawsuit under this Act, or
otherwise to restrict, expand, or modify any sovereign immunity of a State or
local government or Indian tribe.

(2)

Provision of information

A State, through its attorney general, or a
local government or Indian tribe that levies a tax subject to section 2A(a)(3),
through its chief law enforcement officer, may provide evidence of a violation
of this Act by any person not subject to State, local, or tribal government
enforcement actions for violations of this Act to the Attorney General of the
United States or a United States attorney, who shall take appropriate actions
to enforce this Act.

(3)

Use of penalties collected

(A)

In general

There is established a separate account in
the Treasury known as the PACT Anti-Trafficking Fund.
Notwithstanding any other provision of law and subject to subparagraph (B), an
amount equal to 50 percent of any criminal and civil penalties collected by the
Federal Government in enforcing this Act shall be transferred into the PACT
Anti-Trafficking Fund and shall be available to the Attorney General of the
United States for purposes of enforcing this Act and other laws relating to
contraband tobacco products.

(B)

Allocation of funds

Of the amount available to the Attorney
General of the United States under subparagraph (A), not less than 50 percent
shall be made available only to the agencies and offices within the Department
of Justice that were responsible for the enforcement actions in which the
penalties concerned were imposed or for any underlying investigations.

(4)

Nonexclusivity of remedy

(A)

In general

The remedies available under this section
and section 3 are in addition to any other remedies available under Federal,
State, local, tribal, or other law.

(B)

State court proceedings

Nothing in this Act shall be construed to
expand, restrict, or otherwise modify any right of an authorized State official
to proceed in State court, or take other enforcement actions, on the basis of
an alleged violation of State or other law.

(C)

Tribal court proceedings

Nothing in this Act shall be construed to
expand, restrict, or otherwise modify any right of an authorized Indian tribal
government official to proceed in tribal court, or take other enforcement
actions, on the basis of an alleged violation of tribal law.

(D)

Local government enforcement

Nothing in this Act shall be construed to
expand, restrict, or otherwise modify any right of an authorized local
government official to proceed in State court, or take other enforcement
actions, on the basis of an alleged violation of local or other law.

(d)

Persons dealing in tobacco
products

Any person who holds
a permit under section 5712 of the Internal Revenue Code of 1986 (regarding
permitting of manufacturers and importers of tobacco products and export
warehouse proprietors) may bring an action in an appropriate United States
district court to prevent and restrain violations of this Act by any person
other than a State, local, or tribal government.

(e)

Notice

(1)

Persons dealing in tobacco
products

Any person who
commences a civil action under subsection (d) shall inform the Attorney General
of the United States of the action.

(2)

State, local, and tribal
actions

It is the sense of
Congress that the attorney general of any State, or chief law enforcement
officer of any locality or tribe, that commences a civil action under this
section should inform the Attorney General of the United States of the
action.

(f)

Public notice

(1)

In general

The Attorney General of the United States
shall make available to the public, by posting information on the Internet and
by other appropriate means, information regarding all enforcement actions
brought by the United States, or reported to the Attorney General of the United
States, under this section, including information regarding the resolution of
the enforcement actions and how the Attorney General of the United States has
responded to referrals of evidence of violations pursuant to subsection
(c)(2).

(2)

Reports to Congress

Not later than 1 year after the date of
enactment of the Prevent All Cigarette
Trafficking Act of 2009, and every year thereafter until the date
that is 5 years after such date of enactment, the Attorney General of the
United States shall submit to Congress a report containing the information
described in paragraph
(1).

.

3.

Treatment of cigarettes and smokeless
tobacco as nonmailable matter

(a)

In general

Chapter 83 of title 18, United States Code,
is amended by inserting after section 1716D the following:

1716E.

Tobacco products as nonmailable

(a)

Prohibition

(1)

In general

All cigarettes and smokeless tobacco (as
those terms are defined in section 1 of the Act of October 19, 1949, commonly
referred to as the Jenkins Act) are nonmailable and shall not be deposited in
or carried through the mails. The United States Postal Service shall not accept
for delivery or transmit through the mails any package that it knows or has
reasonable cause to believe contains any cigarettes or smokeless tobacco made
nonmailable by this paragraph.

(2)

Reasonable cause

For the purposes of this subsection
reasonable cause includes—

(A)

a statement on a publicly available
website, or an advertisement, by any person that the person will mail matter
which is nonmailable under this section in return for payment; or

(B)

the fact that the person is on the list
created under section 2A(e) of the Jenkins Act.

(b)

Exceptions

(1)

Cigars

Subsection (a) shall not apply to cigars
(as defined in section 5702(a) of the Internal Revenue Code of 1986).

(2)

Geographic exception

Subsection (a) shall not apply to mailings
within the State of Alaska or within the State of Hawaii.

(3)

Business purposes

(A)

In general

Subsection (a) shall not apply to tobacco
products mailed only—

(i)

for business purposes between legally
operating businesses that have all applicable State and Federal Government
licenses or permits and are engaged in tobacco product manufacturing,
distribution, wholesale, export, import, testing, investigation, or research;
or

(ii)

for regulatory purposes between any
business described in clause (i) and an agency of the Federal Government or a
State government.

(B)

Rules

(i)

In general

Not later than 180 days after the date of
enactment of the Prevent All Cigarette
Trafficking Act of 2009, the Postmaster General shall issue a
final rule which shall establish the standards and requirements that apply to
all mailings described in subparagraph (A).

(ii)

Contents

The final rule issued under clause (i)
shall require—

(I)

the United States Postal Service to verify
that any person submitting an otherwise nonmailable tobacco product into the
mails as authorized under this paragraph is a business or government agency
permitted to make a mailing under this paragraph;

(II)

the United States Postal Service to ensure
that any recipient of an otherwise nonmailable tobacco product sent through the
mails under this paragraph is a business or government agency that may lawfully
receive the product;

(III)

that any mailing described in subparagraph
(A) shall be sent through the systems of the United States Postal Service that
provide for the tracking and confirmation of the delivery;

(IV)

that the identity of the business or
government entity submitting the mailing containing otherwise nonmailable
tobacco products for delivery and the identity of the business or government
entity receiving the mailing are clearly set forth on the package;

(V)

the United States Postal Service to
maintain identifying information described in subclause (IV) during the 3-year
period beginning on the date of the mailing and make the information available
to the Postal Service, the Attorney General of the United States, and to
persons eligible to bring enforcement actions under section 3(d) of the Prevent
All Cigarette Trafficking Act of 2009;

(VI)

that any mailing described in subparagraph
(A) be marked with a United States Postal Service label or marking that makes
it clear to employees of the United States Postal Service that it is a
permitted mailing of otherwise nonmailable tobacco products that may be
delivered only to a permitted government agency or business and may not be
delivered to any residence or individual person; and

(VII)

that any mailing described in subparagraph
(A) be delivered only to a verified employee of the recipient business or
government agency, who is not a minor and who shall be required to sign for the
mailing.

(C)

Definition

In this paragraph, the term
minor means an individual who is less than the minimum age
required for the legal sale or purchase of tobacco products as determined by
applicable law at the place the individual is located.

(4)

Certain individuals

(A)

In general

Subsection (a) shall not apply to tobacco
products mailed by individuals who are not minors for noncommercial purposes,
including the return of a damaged or unacceptable tobacco product to the
manufacturer.

(B)

Rules

(i)

In general

Not later than 180 days after the date of
enactment of the Prevent All Cigarette
Trafficking Act of 2009, the Postmaster General shall issue a
final rule which shall establish the standards and requirements that apply to
all mailings described in subparagraph (A).

(ii)

Contents

The final rule issued under clause (i)
shall require—

(I)

the United States Postal Service to verify
that any person submitting an otherwise nonmailable tobacco product into the
mails as authorized under this paragraph is the individual identified on the
return address label of the package and is not a minor;

(II)

for a mailing to an individual, the United
States Postal Service to require the person submitting the otherwise
nonmailable tobacco product into the mails as authorized by this paragraph to
affirm that the recipient is not a minor;

(III)

that any package mailed under this
paragraph shall weigh not more than 10 ounces;

(IV)

that any mailing described in subparagraph
(A) shall be sent through the systems of the United States Postal Service that
provide for the tracking and confirmation of the delivery;

(V)

that a mailing described in subparagraph
(A) shall not be delivered or placed in the possession of any individual who
has not been verified as not being a minor;

(VI)

for a mailing described in subparagraph (A)
to an individual, that the United States Postal Service shall deliver the
package only to a recipient who is verified not to be a minor at the recipient
address or transfer it for delivery to an Air/Army Postal Office or Fleet
Postal Office number designated in the recipient address; and

(VII)

that no person may initiate more than 10
mailings described in subparagraph (A) during any 30-day period.

(C)

Definition

In this paragraph, the term
minor means an individual who is less than the minimum age
required for the legal sale or purchase of tobacco products as determined by
applicable law at the place the individual is located.

(5)

Exception for mailings for consumer testing
by manufacturers

(A)

In general

Subject to subparagraph (B), subsection (a)
shall not preclude a legally operating cigarette manufacturer or a legally
authorized agent of a legally operating cigarette manufacturer from using the
United States Postal Service to mail cigarettes to verified adult smoker solely
for consumer testing purposes, if—

(i)

the cigarette manufacturer has a permit, in
good standing, issued under section 5713 of the Internal Revenue Code of
1986;

(ii)

the package of cigarettes mailed under this
paragraph contains not more than 12 packs of cigarettes (240
cigarettes);

(iii)

the recipient does not receive more than 1
package of cigarettes from any 1 cigarette manufacturer under this paragraph
during any 30-day period;

(iv)

all taxes on the cigarettes mailed under
this paragraph levied by the State and locality of delivery are paid to the
State and locality before delivery, and tax stamps or other tax-payment indicia
are affixed to the cigarettes as required by law; and

(v)(I)

the recipient has not made any payments of
any kind in exchange for receiving the cigarettes;

(II)

the
recipient is paid a fee by the manufacturer or agent of the manufacturer for
participation in consumer product tests; and

(III)

the
recipient, in connection with the tests, evaluates the cigarettes and provides
feedback to the manufacturer or agent.

(B)

Limitations

Subparagraph (A) shall not—

(i)

permit a mailing of cigarettes to an
individual located in any State that prohibits the delivery or shipment of
cigarettes to individuals in the State, or preempt, limit, or otherwise affect
any related State laws; or

(ii)

permit a manufacturer, directly or through
a legally authorized agent, to mail cigarettes in any calendar year in a total
amount greater than 1 percent of the total cigarette sales of the manufacturer
in the United States during the calendar year before the date of the
mailing.

(C)

Rules

(i)

In general

Not later than 180 days after the date of
enactment of the Prevent All Cigarette
Trafficking Act of 2009, the Postmaster General shall issue a
final rule which shall establish the standards and requirements that apply to
all mailings described in subparagraph (A).

(ii)

Contents

The final rule issued under clause (i)
shall require—

(I)

the United States Postal Service to verify
that any person submitting a tobacco product into the mails under this
paragraph is a legally operating cigarette manufacturer permitted to make a
mailing under this paragraph, or an agent legally authorized by the legally
operating cigarette manufacturer to submit the tobacco product into the mails
on behalf of the manufacturer;

(II)

the legally operating cigarette
manufacturer submitting the cigarettes into the mails under this paragraph to
affirm that—

(aa)

the manufacturer or the legally authorized
agent of the manufacturer has verified that the recipient is an adult
established smoker;

(bb)

the recipient has not made any payment for
the cigarettes;

(cc)

the recipient has signed a written
statement that is in effect indicating that the recipient wishes to receive the
mailings; and

(dd)

the manufacturer or the legally authorized
agent of the manufacturer has offered the opportunity for the recipient to
withdraw the written statement described in item (cc) not less frequently than
once in every 3-month period;

(III)

the legally operating cigarette
manufacturer or the legally authorized agent of the manufacturer submitting the
cigarettes into the mails under this paragraph to affirm that any package
mailed under this paragraph contains not more than 12 packs of cigarettes (240
cigarettes) on which all taxes levied on the cigarettes by the State and
locality of delivery have been paid and all related State tax stamps or other
tax-payment indicia have been applied;

(IV)

that any mailing described in subparagraph
(A) shall be sent through the systems of the United States Postal Service that
provide for the tracking and confirmation of the delivery;

(V)

the United States Postal Service to
maintain records relating to a mailing described in subparagraph (A) during the
3-year period beginning on the date of the mailing and make the information
available to persons enforcing this section;

(VI)

that any mailing described in subparagraph
(A) be marked with a United States Postal Service label or marking that makes
it clear to employees of the United States Postal Service that it is a
permitted mailing of otherwise nonmailable tobacco products that may be
delivered only to the named recipient after verifying that the recipient is an
adult; and

(VII)

the United States Postal Service shall
deliver a mailing described in subparagraph (A) only to the named recipient and
only after verifying that the recipient is an adult.

(D)

Definitions

In this paragraph—

(i)

the term adult means an
individual who is not less than 21 years of age; and

(ii)

the term consumer testing
means testing limited to formal data collection and analysis for the specific
purpose of evaluating the product for quality assurance and benchmarking
purposes of cigarette brands or sub-brands among existing adult smokers.

(6)

Federal Government agencies

An agency of the Federal Government
involved in the consumer testing of tobacco products solely for public health
purposes may mail cigarettes under the same requirements, restrictions, and
rules and procedures that apply to consumer testing mailings of cigarettes by
manufacturers under paragraph (5), except that the agency shall not be required
to pay the recipients for participating in the consumer testing.

(c)

Seizure and forfeiture

Any cigarettes or smokeless tobacco made
nonmailable by this subsection that are deposited in the mails shall be subject
to seizure and forfeiture, pursuant to the procedures set forth in chapter 46
of this title. Any tobacco products seized and forfeited under this subsection
shall be destroyed or retained by the Federal Government for the detection or
prosecution of crimes or related investigations and then destroyed.

(d)

Additional penalties

In addition to any other fines and
penalties under this title for violations of this section, any person violating
this section shall be subject to an additional civil penalty in the amount
equal to 10 times the retail value of the nonmailable cigarettes or smokeless
tobacco, including all Federal, State, and local taxes.

(e)

Criminal penalty

Whoever knowingly deposits for mailing or
delivery, or knowingly causes to be delivered by mail, according to the
direction thereon, or at any place at which it is directed to be delivered by
the person to whom it is addressed, anything that is nonmailable matter under
this section shall be fined under this title, imprisoned not more than 1 year,
or both.

(f)

Use of penalties

There is established a separate account in
the Treasury, to be known as the PACT Postal Service Fund.
Notwithstanding any other provision of law, an amount equal to 50 percent of
any criminal fines, civil penalties, or other monetary penalties collected by
the Federal Government in enforcing this section shall be transferred into the
PACT Postal Service Fund and shall be available to the Postmaster General for
the purpose of enforcing this subsection.

(g)

Coordination of efforts

The Postmaster General shall cooperate and
coordinate efforts to enforce this section with related enforcement activities
of any other Federal agency or agency of any State, local, or tribal
government, whenever appropriate.

A State, through its attorney general, or a
local government or Indian tribe that levies an excise tax on tobacco products,
through its chief law enforcement officer, may in a civil action in a United
States district court obtain appropriate relief with respect to a violation of
this section. Appropriate relief includes injunctive and equitable relief and
damages equal to the amount of unpaid taxes on tobacco products mailed in
violation of this section to addressees in that State, locality, or tribal
land.

(2)

Sovereign immunity

Nothing in this subsection shall be deemed
to abrogate or constitute a waiver of any sovereign immunity of a State or
local government or Indian tribe against any unconsented lawsuit under
paragraph (1), or otherwise to restrict, expand, or modify any sovereign
immunity of a State or local government or Indian tribe.

(3)

Attorney General referral

A State, through its attorney general, or a
local government or Indian tribe that levies an excise tax on tobacco products,
through its chief law enforcement officer, may provide evidence of a violation
of this section for commercial purposes by any person not subject to State,
local, or tribal government enforcement actions for violations of this section
to the Attorney General of the United States, who shall take appropriate
actions to enforce this section.

(4)

Nonexclusivity of remedies

The remedies available under this
subsection are in addition to any other remedies available under Federal,
State, local, tribal, or other law. Nothing in this subsection shall be
construed to expand, restrict, or otherwise modify any right of an authorized
State, local, or tribal government official to proceed in a State, tribal, or
other appropriate court, or take other enforcement actions, on the basis of an
alleged violation of State, local, tribal, or other law.

(5)

Other enforcement actions

Nothing in this subsection shall be
construed to prohibit an authorized State official from proceeding in State
court on the basis of an alleged violation of any general civil or criminal
statute of the State.

(i)

Definition

In this section, the term
State has the meaning given that term in section
1716(k).

.

(b)

Clerical amendment

The table of sections for chapter 83 of
title 18 is amended by inserting after the item relating to section 1716D the
following:

1716E. Tobacco products as
nonmailable.

.

4.

Inspection by bureau of alcohol, tobacco,
firearms, and explosives of records of certain cigarette and smokeless tobacco
sellers; civil penalty

Section
2343(c) of title 18, United States Code, is amended to read as follows:

(c)(1)

Any officer of the Bureau of Alcohol,
Tobacco, Firearms, and Explosives may, during normal business hours, enter the
premises of any person described in subsection (a) or (b) for the purposes of
inspecting—

(A)

any records or information required to be
maintained by the person under this chapter; or

(B)

any cigarettes or smokeless tobacco kept or
stored by the person at the premises.

(2)

The district courts of the United States
shall have the authority in a civil action under this subsection to compel
inspections authorized by paragraph (1).

(3)

Whoever denies access to an officer under
paragraph (1), or who fails to comply with an order issued under paragraph (2),
shall be subject to a civil penalty in an amount not to exceed
$10,000.

.

5.

Exclusions regarding Indian Tribes and
Tribal matters

(a)

In general

Nothing in this Act or the amendments made
by this Act shall be construed to amend, modify, or otherwise affect—

(1)

any agreements, compacts, or other
intergovernmental arrangements between any State or local government and any
government of an Indian tribe (as that term is defined in section 4(e) of the
Indian Self-Determination and Education
Assistance Act (25 U.S.C. 450b(e)) relating to the collection of
taxes on cigarettes or smokeless tobacco sold in Indian country;

(2)

any State laws that authorize or otherwise
pertain to any such intergovernmental arrangements or create special rules or
procedures for the collection of State, local, or tribal taxes on cigarettes or
smokeless tobacco sold in Indian country;

(3)

any limitations under Federal or State law,
including Federal common law and treaties, on State, local, and tribal tax and
regulatory authority with respect to the sale, use, or distribution of
cigarettes and smokeless tobacco by or to Indian tribes, tribal members, tribal
enterprises, or in Indian country;

(4)

any Federal law, including Federal common
law and treaties, regarding State jurisdiction, or lack thereof, over any
tribe, tribal members, tribal enterprises, tribal reservations, or other lands
held by the United States in trust for one or more Indian tribes; or

(5)

any State or local government authority to
bring enforcement actions against persons located in Indian country.

(b)

Coordination of law
enforcement

Nothing in this
Act or the amendments made by this Act shall be construed to inhibit or
otherwise affect any coordinated law enforcement effort by 1 or more States or
other jurisdictions, including Indian tribes, through interstate compact or
otherwise, that—

(1)

provides for the administration of tobacco
product laws or laws pertaining to interstate sales or other sales of tobacco
products;

(2)

provides for the seizure of tobacco
products or other property related to a violation of such laws; or

(3)

establishes cooperative programs for the
administration of such laws.

(c)

Treatment of State and local
governments

Nothing in this
Act or the amendments made by this Act shall be construed to authorize,
deputize, or commission States or local governments as instrumentalities of the
United States.

(d)

Enforcement within Indian
Country

Nothing in this Act
or the amendments made by this Act shall prohibit, limit, or restrict
enforcement by the Attorney General of the United States of this Act or an
amendment made by this Act within Indian country.

(e)

Ambiguity

Any ambiguity between the language of this
section or its application and any other provision of this Act shall be
resolved in favor of this section.

(f)

Definitions

In this section—

(1)

the term Indian country has
the meaning given that term in section 1 of the Jenkins Act, as amended by this
Act; and

(2)

the term tribal enterprise
means any business enterprise, regardless of whether incorporated or
unincorporated under Federal or tribal law, of an Indian tribe or group of
Indian tribes.

6.

Effective date

(a)

In general

Except as provided in subsection (b), this
Act shall take effect on the date that is 90 days after the date of enactment
of this Act.

(b)

BATFE authority

The amendments made by section 4 shall take
effect on the date of enactment of this Act.

7.

Severability

If any provision of this Act, or any
amendment made by this Act, or the application thereof to any person or
circumstance, is held invalid, the remainder of the Act and the application of
the Act to any other person or circumstance shall not be affected
thereby.

8.

Sense of Congress concerning the
precedential effect of this Act

It is the sense of Congress that unique
harms are associated with online cigarette sales, including problems with
verifying the ages of consumers in the digital market and the long-term health
problems associated with the use of certain tobacco products. This Act was
enacted recognizing the longstanding interest of Congress in urging compliance
with States’ laws regulating remote sales of certain tobacco products to
citizens of those States, including the passage of the Jenkins Act over 50
years ago, which established reporting requirements for out-of-State companies
that sell certain tobacco products to citizens of the taxing States, and which
gave authority to the Department of Justice and the Bureau of Alcohol, Tobacco,
Firearms, and Explosives to enforce the Jenkins Act. In light of the unique
harms and circumstances surrounding the online sale of certain tobacco
products, this Act is intended to help collect cigarette excise taxes, to stop
tobacco sales to underage youth, and to help the States enforce their laws that
target the online sales of certain tobacco products only. This Act is in no way
meant to create a precedent regarding the collection of State sales or use
taxes by, or the validity of efforts to impose other types of taxes on,
out-of-State entities that do not have a physical presence within the taxing
State.